Strategic Alignment

Achieving Strategic Alignment is the first step for any successful merger, acquisition, divestment or joint venture project. During the Strategic Alignment phase the project leadership establishes the goals, scope and Transition Program Office (TPO) for the project.

Often Post Merger IT Strategy projects are tempted to “just start” and skip the critical activities that need to be defined up front. Skipping these steps will result in projects that lose critical resources, experience delays and have significant cost overruns.

The Strategic Alignment phase can be quickly executed.

Strategy Alignment Phase Key Activities

  • Clear Understanding of Strategic Intent – the project leadership needs to understand exactly why the M&A activity is being executed and how IT needs to support the business. It is also vital to understand the key components of the deal, such as what assets are being transferred and any milestone dates.
  • Work Scope Definition – identify which business units, locations, products, services, technologies, infrastructure and customers are involved in the project.
  • Risk Workshop – a short workshop to identify the key risk areas that need to be managed during the project. The risks should include key personnel, infrastructure and applications. The key risk areas will influence the project’s organizational structure and management reporting.
  • Setup TPO – establish the Transition Program office and the key leadership positions to make the project successful. Define the work streams, work stream owners and the key IT / business leaders.
  • Establish Management Reporting – frequent, cross organizational reporting is critical for the success of the project. Easy to use reporting tools are needed to identify risks, solve issues and keep the program on track.
  • Buyer / Seller Communication – define how the two business organizations communicate during the project.

Business Models

During the Strategic Alignment step, IT also has to understand the “to-be” business model. There are four business models the new company could use:

  • The acquiring company’s business model
  • The target company’s business model
  • Hybrid business model
  • New organization & process